Sunday, April 25, 2010

Well another day, another country, and don't let anyone tell me that international travel is fun. I have now been travelling for two weeks promoting Murdoch James Estate wines in Vietnam and Hong Kong and while the customer interaction is fantastic, I have to say that the travel itself is not. The GFC (trendy abbreviation for the Global Financial Crisis) has hit wineries just as hard as any other business; sales are down, there is a mad scramble to get new distributors, and prices are tumbling. In respect of the latter I have seen crazy prices recently for wines which must be below the cost of production. Why? Because many wineries have high borrowings built up over the years to fund development, and now that banks are taking a hard line and not lending to help wineries handle the down turn, they have to sell at any price they can just to survive.

While we have tried to hold prices at sensible levels at Murdoch James, we have had to work hard to cut expenses, hence my comment above about travel. Don't look for me in either business class, Premium economy or 5 or 4 star hotels. The room I type this in has to be the smallest hotel room I have ever stayed in, but it has saved the company a lot of money.

All that is offset by the thrill of tasting wine with Murdoch James wine lovers all around the world. Getting feedback that our wines compare with the very best from consumers certainly makes it all worthwhile. Since I arrived here Wednesday, I have conducted staff training with the fantastic team at Nathan Fine Wines, called on sommeliers in some great restaurants, done tastings in wine bars with their customers and hosted a winemakers dinner. The latter in the Santa Lucia restaurant, on the 38th floor of the Panorama Hotel (I'm told it is the highest restaurant in Hong Kong). How's that for a view? At that dinner, we matched 7 of our wines with a degustation menu, and again got great feedback on our wines, particularly the Pinot Noir, Pinot Gris and Riesling. I posted the menu on Facebook just to make you all a little envious! Copy this link to your browser and salivate: http://bit.ly/aTLC4b

Saturday, April 24, 2010

Have been in Hong Kong a few days now promoting Murdoch James Estate wines, after leaving Hanoi on Wednesday last.

Vietnam was a great country to visit, and the contrast between Ho Chi Minh City and Hanoi was dramatic.The former, bustling and growing fast, but with that change a lot of history has gone. Hanoi by contrast still has it's 'Old Town' with narrow streets and leafy avenues, plus it's famous cathedral. It is still growing fast, but in a more controlled manner. The local people we great, very friendly and helpful, while the restaurants served excellent food and were great value for money. One example: two course lunch with two beers for just NZ$12! The roadside food stalls were even better value and exciting to experment with.

I did have to pay special attention to the currency though. One NZ$ = 13,800 Vietnamese Dong, so not uncommon to get bills for many hundred thousand Dong! One evening meal for 4 of us was Dong 1,300,000. Scary, until you divide by 13,800 and realise that is only NZ$100!

On the business side, the trip has gone well, and we hope to have a distributor for Murdoch James Estate wines in Vietnam in the not too distant future. I was amazed to see how popular red wnes were compared to whites. In a hot climate with a cuisine that is subtle and delicate, drinking red wines seemed odd, yet I am told over 85-90% of all wines consumed are reds. While in Hanoi, we did a tasting for the wine trade at the Hanoi Lakeside Intercontinental; what a stunning hotel! I have put a lot of images of the hotel, on our Facebook page, so log on and view them - I think I'm a reasonable photographer actually, but don't be afraid to tell me otherwise! If you do a search on Facebook for Murdoch James Estate you'll find us.Or copy and paste the shortened URL that follows: http://bit.ly/aTLC4b

Meantime, here's is an image to wet your appetit, it is a world class hotel with an amazing design.

AsI flew out to Hong Kong, I was thinking that there is plenty of room for me to grow Murdoch James Estate wine sales in Vietnam, but it won't be easy. Taxes on wines are over 100%, there is huge competition from Chile and Australia and beverage consumption is only slowing swinging away from whisky and cognac. The big hotels like this will be an important target market, as will the coastal tourist resorts; and I'll certainly need to come back!

Sunday, April 18, 2010

I have now been in Ho Chi Minh City, Vietnam for 5 days and it is both exciting and overwhelming; exciting because of the potential here for our wines, and also because of the dynamism of the city, and overwhelming because of complexity and rapid rate of growth of industry.

My first day was a break to get over the long flight from New Zealand, so I thought I would just take a walk and unwind.

That was my first mistake - one cannot walk and unwind in Ho Chi Minh City. The traffic is crazy, motorbikes everywhere and it seemed to me that traffic lights and pedestrian crossings were indicative only.

It took me a while to build up courage to cross roads. Have a look at these images and you will get a feel for what I am talking about, but they don't do justice to the real life experience!

Next day was to set up the first Trade tasting which was organised by the New Zealand Trade & Enterprise team here. It was an excellent event with great turnout and an ideal showcase for New Zealand Food and Wine. From this event I was able to make appointments with several potential distributors and have since had follow up meetings, with positive outcomes.

Again, the accompanying photographs don't do justice to the quality of the event, nor the venue (Park Hyatt, Saigon). I was very impressed with the interest of both consumers and the wine trade in New Zealand wines, however we do face a challenge in achieving sales in a market which has been dominated to date by French and Chilean wine producers. They have got a big start on us and we have a lot of ground to make up. But, as in all markets the people who are prepared to do the hard yards, pounding the streets and building relationships, will be the ones who succeed in Vietnam.

Friday and Saturday I spend following upon sales leads, and then our stay in Ho Chi Minh City finished Saturday night at the 14th Annual NZ Wine & Food Festival in Vietnam.

Saturday, April 17, 2010

Well, vintage 2010 has started and I am reminded how I said exactly 12 months ago that I would blog every day on the 2009 vintage! Well, I'm not going to do that again this year - I learnt from bitter experience how challenging it is to publish interesting posts and still do the day job! But I will certainly continue the blog and try and post weekly.

It was easy to write this post as when I did it I was squeezed in a lovely economy seat on a flight to Vietnam. On one side of me fellow passenger is snoring loudly, while in front of me two babies are testing their lung-power. No snoring for me, so I thought "what a great opportunity to blog"......

I flew on Cathay Pacific, and when I read the newspaper on board I was a little concerned by the headlines: "Pilots hailed as hero's" which was reporting on a recent Cathay crash, but we got there safely. In fact, considering how full the flight was, and that I was in economy, I though both the cabin crew and the flight were superb. I strongly recommend them.

This basis of the trip is to go to Vietnam for two weeks to participate in the NZ Wine and Food Fairs in Ho Chi Minh City and Hanoi, and then off to Hong Kong to work with our excellent importer there (Nathan Fine Wines).

There is a very active NZ Trade and Enterprise team in Vietnam and they have organised both consumer and trade tasting events in each city. With the trade, they have invited 10 NZ wineries who have not exported to Vietnam before to participate, and they have invited wine distributors who have an interest in representing NZ wines to the tastings. On top of that, they have set up despatch of samples and promotional materials. I have been really impressed at their organisation and efforts - first class. It should all be synergistic. The NZ T&E Vietnam team are to be commended on this initiative. I will also see a number of other importers that I have set up appointments with individually too. So, it will be a busy week, and I hope to come out of it with with new business. On the personal front, I have not been to Vietnam before, so it is an exciting trip for me.

As I said, after Vietnam I fly to Hong Kong to work with our existing importer there. We have set up some staff training and sales calls, but the thing I look forward to mostly are the dinners our agent has set up with his key customers - tasting wines with food is the very best way to present the wines, so it will be a great opportunity. I saw yesterday one of the menus - a 6 course degustation menu with each course partnered with one of our wines. I'll copy it into a future blog, just to make you all envious!

Wednesday, April 14, 2010

We started our 2010 harvest last Thursday (8th April 2010) and, while we expected a smaller crop than last year doue to the bad weather at flowering and the cold weather in January last, as the grapes are coming in, it is much smaller than we thought. In some varieties, particularly the chardonnay, we are down over 50%. Pinot and Syrah is not so bad, but also smaller crops. If you think about it that means for the same inputs, we get less grapes (read that as less wine to sell), and at a higher average cost per tonne. If we have to buy in grapes to plug any demand gaps, that is a double-whammy on the budget and not pleasant to contemplate.

Those of you who know me know that I am nothing if not an optomist! So, yes there is a silver lining to the cloud - small cops, but also great quality. Winemaker Carl thinks this is the best quality Pinot Noir grapes we have harvested ever, so watch out for the 2010 releases.

Now in an ideal world, one would simply charge more per bottle, but the wine world does not work that way. In fact, due to serious oversupply out of Australia and Marlborough, the pressure on price is downwards. Just holding prices flat is pretty good in the current environment. So we have to absorb these costs with their negative impact on profitability. While our wines are very highly regarded, it is not possible to apply price increases at present. And just when we were starting to make a good profit - ah well, no-one told me wine-making was an easy path to riches.........

That brings me back to our new social media strategy, which is designed to to drive sales through non-traditional channels, where costs are not so high. For example, selling on-line direct from Murdoch James means we don't lose margin to middle-men.We are also looking at working with innovative on-line marketers in international markets, and all our communications tools are now in place to underpin that (Blog, Twitter, Face-book, Website, etc) so hopefully the message is getting out there that Murdoch James Estate is determined to make the most of these new technologies to communicate with our potential customers and give them the confidence to try our wines. The more I enter into this medium, the more it reinforces to me how dramatically and quickly the way wines are being purchased is changing. I have an emerging view that one day, apart from on-premise sales, we will be selling all our wines one way or other over the internet.

Now, I'm off to Vietnam and Hong Kong this week to promote our wines, so some interesting posts to follow.

About Me

We are a family owned vineyard in Martinborough, regarded by many as New Zealand's finest Pinot Noir region.
My wife Jill manages the business, I am responsible for sales and exports, and our son Carl makes the wines. We have a great vineyard and office team; Nicola - Carl's partner looks after marketing and sales, Lynn - office' Wonder Woman' looks after all our administration, while Cliff, Dan, Chris and Steve keep our vineyard looking the best in town!
It is a fun place to work, and the wines are pretty good too!